Building a house ????

**Limecuda** · 07.21.06, 01:05 AM

I have never had a house built. I have only bought them already done. Here is the question. I recently bought 8 acres of land and intend on at some point building a house. I got the land at a good price. My new neighbor with one acre just had his land valued at $21,000. **taxes**

This is rural Texas as well.

Obviously you have to put your land up for the mortgage. Does the bank consider the land as a down payment? I'll just throw some easy round numbers out. Say the land is valued at $50,000 and the house will cost $200,000 to build. Is your mortgage based on $150,000 or is still $200,000? Is there a percentage used on the value of land to determine a down payment and mortgage value? I have heard several different ways and know some guys here have built before. What's the deal? My wife is on me to sell the current house and get after "her" new house and I'm the number cruncher.

**csm5150** · 07.21.06, 03:41 AM

Originally Posted by Limecuda

I have never had a house built. I have only bought them already done. Here is the question. I recently bought 8 acres of land and intend on at some point building a house. I got the land at a good price. My new neighbor with one acre just had his land valued at $21,000. **taxes**

This is rural Texas as well.

Obviously you have to put your land up for the mortgage. Does the bank consider the land as a down payment? I'll just throw some easy round numbers out. Say the land is valued at $50,000 and the house will cost $200,000 to build. Is your mortgage based on $150,000 or is still $200,000? Is there a percentage used on the value of land to determine a down payment and mortgage value? I have heard several different ways and know some guys here have built before. What's the deal? My wife is on me to sell the current house and get after "her" new house and I'm the number cruncher.

I know in my situation, the land was either a 1/4 or 1/2 of an acre and it was used as part of the down payment since the land was in my name.

**Ted Van Halen** · 07.21.06, 04:58 AM

Wife & I have been in our new house 9 months. I owned my land free & clear before I built. It was not considered part of the down payment as I wife & I had saved some $ along and sold another piece of land to help finance the house. I *think* you can use the land as DP though. We got a better rate though because we had some cash & owned the land.

Also, a little common sense advice on building a house:

1- Don't do business with someone you aren't willing to sue. My builder is a very likeable guy. Puts you at ease immediately. Did I hesitate to snatch a knot in his ass about some things I didn't like? No. Did he fix them to my satisfaction? Yes & I'd use him again without hesitation.

2- ALWAYS use liscenced contractors. My MIL is living the hell of a non-liscenced contractor now. 50% over budget & 150% longer than the job was contracted for. She's on her second contractor now.

3- This is one of, if not the biggest things you'll do in your life. Make a good choice. Get references from people you trust implicilty. Preferably people that have built recently.

4- Don't trust building inspectors to look out for your best interest. See #2 above.

5- Things that are iffy on the prints will be major sore spots once built. Before the first shovel of dirt is moved walk thru the house mentally. Flip every switch open every door & turn every knob. Do the same for the appliances also. I dislike where my frig is & can't do anything about it that would'nt cost thousands.

6- If having to choose between upgrades (hardwood floors vs Corian counters), put the money w/ things that are hardest to upgrade later.

I've got tons more I could tell you but I'm at work & this is getting long. PM me if you want. I'll gladly drop the knowledge.

Ted

**namedmydaughterHALEN** · 07.21.06, 05:40 AM

all i know is that building a house was almost the end of my marrige. we had fights that were like no others. it got real ugly. i didn't think we would make it. it is the hardest thing we had to do, but we did a lot of the work ourselves to save money.
good luck!

**jimmy812** · 07.21.06, 06:18 AM

Originally Posted by namedmydaughterHALEN

all i know is that building a house was almost the end of my marrige. we had fights that were like no others. it got real ugly. i didn't think we would make it. it is the hardest thing we had to do, but we did a lot of the work ourselves to save money.
good luck!

One of my buddies that I work with told me that he built his house, and he and his wife had some marriage-threatening fights as well. So, I guess you're not alone. It's a very stressful time and it weighs hard on a couple. My wife and I are actually looking for a house, but houses are so unbelievably expensive here in CT, it's very discouraging. In order to find something half-way decent, you're looking at spending $300,000-$400,000.
There's a house in the neighborhood where I grew up. It's a 30-year old Colonial, 2-car garage, central air, nice neighborhood, and that's about it. They're asking $419,000. Personally I don't think they'll get that much, but still...

Anyway good luck with everything. I'm sure in a couple of years, you'll look back and laugh at the thought of the stress and fights you had--or maybe you'll just feel major relief!

**Limecuda** · 07.21.06, 10:54 AM

Around here $400,000 will have you in a "mansion" type of house. It is amazing how prices vary across the country.

**Brett** · 07.21.06, 11:49 AM

Man you guys haven't seen housing prices until you come to So Cal boys. $400k gets you a 2-bedroom condo if you're lucky.

We just recently purchased a 3-bedroom condo with a 2-car garage, and I don't even want to tell you what we paid. And of course we're doing work on it, so tack on some more cash.

**onefootoutthedoor** · 07.21.06, 02:11 PM

Originally Posted by Brett

Man you guys haven't seen housing prices until you come to So Cal boys. $400k gets you a 2-bedroom condo if you're lucky.

We just recently purchased a 3-bedroom condo with a 2-car garage, and I don't even want to tell you what we paid. And of course we're doing work on it, so tack on some more cash.

Come to my neck of the woods and I'll show you expensive. The wife and I are starting to look and if we wanted to stay in the neighborhood we're in right now, we're looking to pay at least $650,000. What does $650,000 get you exactly? A two bedroom TIC/condo that is anywhere from 50-100 years old.

**5150** · 07.21.06, 02:48 PM

I deliver lumber for a living and you wouldnt believe the amount of mark up on these new houses. Here's an example:

This is one of the most expensive houses our biggest builder sells. It has an glass elevator inside and an 'open-air floor plan.' In other words, you can see from the basement all the way up to the top floor. This property is 30 miles northwest of Philadelphia and it sits on a full 18-hole golf course. The lumber materlal for this house runs about $250K - $300K. Windows run close to $100K if they use the high grade material. The base of this house runs around $900,000. If you were to decide on all options such as a fireplace on each level, additional breakfast nook, etc, move in price is $2.75 MIL. I still cant believe that.

**Ted Van Halen** · 07.21.06, 06:08 PM

Wife & I live 2nd row on a large lake. We bought our land years ago or we would never be able to live here. Here $400K gets you a cinder block fishing hut you'll tear down the day of the closing so you can build something w/ a roof & floor you an't see through. 20 yr old trailers on the dirt roads back behind us are going for $150K & it's only getting worse. Our neighbors bought next door 6 yrs ago for $275K. They're selling it now for $540K. It's a vacation home for them so they're selling out & COMPLETELY building a new house out of pocket as in no mortgage, debt free.

Ted

**Viking** · 07.21.06, 06:59 PM

Originally Posted by Limecuda

Around here $400,000 will have you in a "mansion" type of house. It is amazing how prices vary across the country.

Yeah, same here. You can get a very nice house around here for $50,000. I'm talking 3 BR, 2 Bath kind of thing. $400,000? Shit, someone that can spare that kind of cash please pass it on down and I'll build (or buy) a beauty!

**Viking** · 07.21.06, 07:23 PM

Check this out. This is in the town I live in now. $157,500.

Victorian House

I'd repaint the outside, but I love all that wood on the inside.

**OLO** · 07.21.06, 07:35 PM

Originally Posted by Viking

Check this out. This is in the town I live in now. $157,500.

Victorian House

I'd repaint the outside, but I love all that wood on the inside.

That house in a mid range neighborhood in the Seattle area would be a minimum of $500,000. Put it in a nice area, Queen Ann or Seaward Park and it would fetch a Million.

It is a nice looking house.

**Viking** · 07.21.06, 08:02 PM

Originally Posted by OLO

That house in a mid range neighborhood in the Seattle area would be a minimum of $500,000. Put it in a nice area, Queen Ann or Seaward Park and it would fetch a Million.

It is a nice looking house.

Yes it is. Unfortunately it happens to be smack dab in the middle of this shithole!

**Rebel** · 07.21.06, 08:36 PM

I live in Phoenix (Anthem). The market has slowed down, which slowing down means the house I'm in didn't appreciate 100K this year like it did the previous, it has pretty much leveled off out here.

As far as the question, I don't see why not, it's equity, as long as it's in your name, certainly if there's no outstanding loan on it you could use it as a DP.